NO.097

COMMONWEALTH NATIONAL COMPETITION POLICY PAYMENTS TO STATES AND TERRITORIES

FOR 2001-02

The States and Territories will receive approximately $733.3m in 2001-02 competition

payments, following an independent assessment of their progress in implementing

National Competition Policy reform commitments by the National Competition Council.

All States and Territories will receive their full allocation of payments,

with the exception of Queensland.

The Council has recommended that $270 000 be permanently deducted from Queensland’s

2001-02 competition payments because of the Townsville City Council’s failure

to objectively analyse the cost effectiveness of two-part tariffs in relation

to water reform.

I have accepted this recommendation.

The $270 000 is approximately the amount that Townsville City Council would

receive for successful completion of water reform from the Queensland Government’s

financial incentives scheme for local authorities.

The National Competition Council first raised this matter in the June 1999

second tranche assessment. Due in part to the Townsville City Council’s commitment

to conduct this assessment by June 2001, the Council recommended that the second

tranche payment suspension on account of Queensland urban water reform be lifted.

However, this commitment has not been met.

New South Wales will face further assessment in January 2002, in relation to

implementation of water reform, focusing on whether sufficient progress against

commitments on water property rights has been achieved.

The Council’s original assessment proposed that this supplementary assessment

occur in December 2001, but I have agreed to a request from the Council President

that this be moved to January 2002. This follows advice that New South Wales

is consulting stakeholders on its proposed water property rights registry during

December 2001.

The suspensions imposed on Queensland and the Northern Territory’s 2000-01

competition payments will be lifted and reimbursed. This follows the Council’s

supplementary second tranche assessments in February and June 2001.

I have accepted the Council’s recommendation in relation to Queensland that

the 5 per cent suspension for insufficient progress implementing two part tariffs

for urban water charges and the 10 per cent suspension in relation to progress

in finalising a passenger transport Community Service Obligation framework for

South East Queensland be lifted and reimbursed.

The Northern Territory has had 5 per cent of its competition payments suspended

for failure to introduce the national driver demerits point scheme.

I have accepted the Council’s recommendation that the Northern Territory suspension

be lifted and the withheld funds reinstated. This follows the decision by the

Australian Transport Council to provide an exemption for the Northern Territory

for this element of the Council of Australian Governments’ road reform package.

The details of the National Competition Council’s assessments, including a

detailed assessment of Governments’ progress on water reform, will be available

on the National Competition Council’s website (www.ncc.gov.au).

MELBOURNE

14 December 2001